Whether you have an established business, or are setting one up, our limited company accountants service can help you.
Limited companies have a slightly more complicated set of rules than sole traders and it takes a bit of management. But don't worry we can help you keep on top of it all so you can keep running your business!
Your duties as a director
Directors have legal duties they have to fulfil, so they need to think not only of their own personal tax position, but also that of the company and how they interact.
If you have a limited company you will have to
- prepare accounts that are compliant with the Companies Act 2006 (which incidentally, is the legislative act ever passed in the UK, at a whopping 700 pages),
- file them at Companies House,
- file an annual Confirmation Statement at Companies House, and also
- complete a Corporation Tax return*.
As a limited company accountant we can help you with these requirements.
Typically small company accounts do not need an audit (although this will need to be checked as there are lots of potential errors that could be made here) so that's a benefit, as company audits have a starting cost of around £5,000.
Director's Personal Tax Return
Its worth mentioning here that all directors will need to complete their own personal tax return (this is different to the company's tax return). We can help you with this as well.
The benefits of running a business through a limited company
Whilst there are more requirements as a director, running your business through a company, there are also a lot of benefits:
For starters you benefit from limited liability. This means, broadly, that the most you stand to lose (personally, as a shareholder) is the net assets of the company. In short - the family home is protected**.
In return for this enormous benefit the State requires that you regularly make public what your net assets are and keep them informed as to who's responsible for the business and who owns the business. This is done through the annual accounts, and the confirmation statement.
Companies have their own tax rules - Corporation Tax
We are living during a period of low corporation tax rates. Not so long ago it was 30%, and its now heading towards 17%. These rates apply whether you generate £1,000 of profit, or £1m. Compare this to the tax you pay as an individual on Income Tax, which is currently 45% for income over £150,000. Its much lower, however the real trick is extracting your profit from the company without paying high rates of tax.
As well as the corporation tax, company directors are required to complete a personal tax return each year. This is because being a director gives you a lot of options as to how you get paid including:-
- employing family members,
- loaning yourself money from the business,
- lending the company money and receiving interest on that loan,
- leasing a building to the business.
..the list goes on.
Some of these things are not allowed from a tax perspective, but some just need to be done in the right way. Each have different tax outcomes and its important to choose the right option for your particular circumstances. A good limited company accountant can make all the difference here.
Limited Company accountants for your business
Check out our How We Work page to see if we are the right accountants for you
Or ,if you want to know how much we cost you may be pleasantly surprised to see how cheap your accountancy costs could be
*NOTE: As a limited company director you have a lot of legal duties. We only mentioned a couple here, relevant to the services we provide. Click here for more information on your duties
**NOTE: If you have provided a personal guarantee to the business, perhaps in order to get a bank loan, or in certain other circumstances a companies creditors can "look through" the company's limited status to the shareholders or directors, but generally, the principle of limited liability means your liability is limited.